Katrina Contractors Fuming Over Pay Delays

Lawmakers Fear FEMA Red Tape Will Discourage Builders From Bidding On New Orleans Projects

(AP)  Contractors hired to clean up after Hurricane Katrina are fuming over delays in getting paid by FEMA, and some politicians fear the red tape will discourage companies from bidding on the big rebuilding projects that lie ahead for New Orleans.

One company claims it is owed about $150 million, and some contractors have walked off the job or gone to court to get the money they say they should have been paid for demolition and debris removal completed as much as a year and a half ago.

"You better hope another storm doesn't hit you. You guys will be under water for six months," said Zach Johnson, a Kansas City, Mo.-area contractor who is suing for about $1.7 million for tree-clearing in 2005. "Everybody got a bad taste in their mouth from Louisiana."

Johnson called the whole situation "messed-up, frustrating, depressing" and said he will not pursue any more cleanup and recovery jobs in Louisiana.

"Oh, hell no. Nooo," he said. "I won't be back."

In some cases, cleanup contractors were hired by New Orleans-area parishes on the understanding the Federal Emergency Management Agency would cover most, if not all, the costs.

Contractors must submit their bills to the local governments that hired them. Then the bills have to be sent to the state for approval, after which they are forwarded to FEMA for review. FEMA is responsible for releasing the money back down the chain.

FEMA said slow payments often stem from incomplete paperwork submitted by the contractors and parishes. The agency said it is trying to protect the taxpayer by making sure that the government is not overpaying and that the work was performed as promised.

"We've done our part," spokesman Andrew Thomas said.

The agency said it could not immediately put a total value on delayed payments in the New Orleans region.

In hard-hit St. Bernard Parish, local officials fear the slow-pay reputation will discourage contractors from bidding on the next major phase — the major reconstruction projects involving roads, sewers, schools, and police and fire stations.

The situation is so bad, officials said, that bidders are tough to find for demolition and debris-removal work that remains nearly two years after the storm.

"It's slowing us down, limiting the amount of contractors that will bid and costing us more," said St. Bernard Parish Councilman Joey DiFatta. "This is effectively stopping the recovery."

Local officials said one big reason for the delays is that FEMA underestimated cleanup costs. St. Bernard, for example, is appealing four projects the FEMA valued at nearly $9.3 million but the parish says are worth $16.5 million.

It's been a nightmare," said Amy Blanchard, finance director for St. Bernard Parish.

The city of New Orleans let the Army Corps of Engineers handle contracts for storm cleanup and deal with FEMA, and the Corps said it has seen few disputes with contractors. But St. Bernard, Washington and St. Tammany parishes handled contracting themselves, and are now caught up in red tape.

It is not unusual for federal contractors to have to wait a few months for initial payments. But the delays here have been "very excessive, with no answer in sight for when they're going to get paid," said Ken Naquin, chief executive of the Louisiana Associated General Contractors.

Contractor Lawrence Green said he is owed about $150 million for demolition and debris and sewage hauling in St. Bernard Parish. At one time, he said, his crews stopped picking up debris. They later resumed work.

"Our profits look great on paper, but you have to collect the money," he said.

Cash-strapped St. Bernard and other parishes fear they could be saddled with millions of dollars in costs if FEMA does not pay.

St. Bernard remains largely in ruins and has only about half the annual $50 million budget it had before Katrina. Warped streets wind through neighborhoods, and slabs sit where houses once stood. Waste must be hauled out because the sewers have not been fixed.

FEMA has estimated it will cost $891 million to repair Katrina's damage in St. Bernard.

Omni Pinnacle LLC, a contractor for debris clearing in St. Tammany Parish, is suing for more than $16 million it claims it is owed. St. Tammany also has been sued for more than $9 million by Shaw Environmental & Infrastructure Inc., which was hired to monitor work done by contractors.

The parish itself is suing, too, claiming FEMA has not approved about $3 million to clear clogged canals.

[oleander8]

And while all the requests for payment continue to make their way through the bureaucratic jungle, all the bureaucrats continue collect their paychecks, have their coffee-breaks, go on vacation, and go home to their comfortable homes at night. They could care less about being expedient.

[my2centss]

"A better question, since NONE of these places you picked have had the level of distruction of this area"
Posted by MCVet at 10:26 AM : Jul 19, 2007

Whole towns were destroyed. Greensburg, Kansas?

[rharrin1]

People will be paid when our top dogs start doing their jobs. Sa cheney would say it ( THE F*CKIN BUCK STOPS HERE )

[rharrin1]

A better question, since NONE of these places you picked have had the level of distruction of this area, is why did FEMA work so well under OTHER Administrations. It's so obvious that Bush and his Administration didn't care from the start and trying to find justification for their incompetence doesn't help. Sieg Heil Bush!!
Posted by MCVet at 10:26 AM : Jul 19, 2007

If you recall bush stayed on vacation four days after storm.

[whatdoiknow5]

the contractors and everyone cleaning up has the right to be mad and the right to be paid. Workers cost money, equipment cost money, and to rebuild costs money. What i do not understand is these people knew they were living in a potential flood area and did not have insurance or maybe the insurance companies just do not want to pay? FEMA should have been better prepared and from the get go told everyone that there would be a timeline for the funds, so that the people of LA could have started to make arrangements.

[whatdoiknow5]

so it seems to reckon that those contractors and clean up crews were never going to get paid. Payment should have started when they started to do the work. I do not blame anyone who wants to work for free, no one from cities they live in are there to help, why should anyone help someone who is not willing to help themselves? what if it had been texas hit so tragically, would the people flee the state in hopes that they could return after everything had been repaired? I dont think so I think we would have stayed and lived in tents to help with the reconstuction of our cities.

[mcvet]

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I wonder why they do not have the same problems in the midwest. Might be that after tornadoes and floods, they did not loot their towns, did not wait for help, got up, and started working on getting their own lives back together by their own hard work.
Posted by my2centss at 10:06 AM : Jul 19, 2007
+ report abuse

A better question, since NONE of these places you picked have had the level of distruction of this area, is why did FEMA work so well under OTHER Administrations. It's so obvious that Bush and his Administration didn't care from the start and trying to find justification for their incompetence doesn't help. Sieg Heil Bush!!

[my2centss]

I wonder why they do not have the same problems in the midwest. Might be that after tornadoes and floods, they did not loot their towns, did not wait for help, got up, and started working on getting their own lives back together by their own hard work.

[horse3farm]

Of course FEMA can't pay the contractors, because all of the money is going to pay the Bush-Cheney contractors in Iraq...who are there only to make money, while our soldiers drink tainted water and live in deplorable conditions. And Bush don't care. He only cares if he's square with the man upstairs.

Guess what, George? You are not square with the man upstairs, no matter what the neocons tell you. Fascist.

[grazinggoat]

ZEITGEISTmovie.com, ZEITGEISTmovie.com, ZEITGEISTmovie.com, every skeptical and every republican should watch it. It's skin scolding.

Thanks fascistusa for this posting.

-With all this I'll never be able to sleep without having the American People remove this tyrant spokesperson whom I called from the beginning the George Walking-Liar Bush.

Again ZEITGEISTmovie.com just copy paste in your URL.
-Now are you going to contract with this government anymore?

[coffeehead-2009]

rolling the boards to one inept subliminal poster bellowing the "rats rats rats" propaganda mantra.

why am I NOT surprised......
there is only room for ONE opinion to be seen and heard via this administrations boot stompers.

[slipster01]

"In some cases, cleanup contractors were hired by New Orleans-area parishes on the understanding the Federal Emergency Management Agency would cover most, if not all, the costs. "

So, they got swindled by the corrupt Democrat Louisiana parish lawmakers, promising what they had no authority to promise.

Why am I not surprised?

[slipster01]

"In some cases, cleanup contractors were hired by New Orleans-area parishes on the understanding the Federal Emergency Management Agency would cover most, if not all, the costs. "

So, they got swindled by the corrupt Democrat Louisiana parish lawmakers, promising what they had no authority to promise.

Why am I not surprised?

[slipster01]

"In some cases, cleanup contractors were hired by New Orleans-area parishes on the understanding the Federal Emergency Management Agency would cover most, if not all, the costs. "

So, they got swindled by the corrupt Democrat Louisiana parish lawmakers, promising what they had no authority to promise.

Why am I not surprised?

[slipster01]

"In some cases, cleanup contractors were hired by New Orleans-area parishes on the understanding the Federal Emergency Management Agency would cover most, if not all, the costs. "

So, they got swindled by the corrupt Democrat Louisiana parish lawmakers, promising what they had no authority to promise.

Why am I not surprised?

[slipster01]

"In some cases, cleanup contractors were hired by New Orleans-area parishes on the understanding the Federal Emergency Management Agency would cover most, if not all, the costs. "

So, they got swindled by the corrupt Democrat Louisiana parish lawmakers, promising what they had no authority to promise.

Why am I not surprised?

[slipster01]

"In some cases, cleanup contractors were hired by New Orleans-area parishes on the understanding the Federal Emergency Management Agency would cover most, if not all, the costs. "

So, they got swindled by the corrupt Democrat Louisiana parish lawmakers, promising what they had no authority to promise.

Why am I not surprised?

[slipster01]

"In some cases, cleanup contractors were hired by New Orleans-area parishes on the understanding the Federal Emergency Management Agency would cover most, if not all, the costs. "

So, they got swindled by the corrupt Democrat Louisiana parish lawmakers, promising what they had no authority to promise.

Why am I not surprised?

[slipster01]

"In some cases, cleanup contractors were hired by New Orleans-area parishes on the understanding the Federal Emergency Management Agency would cover most, if not all, the costs. "

So, they got swindled by the corrupt Democrat Louisiana parish lawmakers, promising what they had no authority to promise.

Why am I not surprised?

[slipster01]

"In some cases, cleanup contractors were hired by New Orleans-area parishes on the understanding the Federal Emergency Management Agency would cover most, if not all, the costs. "

So, they got swindled by the corrupt Democrat Louisiana parish lawmakers, promising what they had no authority to promise.

Why am I not surprised?